Intervene in the market before inflation spirals out of control? For heaven's sake, it is necessary to "be patient", also because the employment objectives are still far away. Fed Chairman Jay Powell, in his last speech before the board meeting, sweeps away the hypothesis of an action on the markets to curb the increase in prices. A rise in inflation, he added, must be factored in, but it will only be temporary.
Together with the inaugural speech by Chinese premier Li Kequiang at the annual party conference, Powell's words marked the course of the stock markets, in particular the Nasdaq (-2,11%), since yesterday officially in correction after losing more than 10 % compared to the maximum. And the reactions were robust, almost violent.
The yield on ten-year T-bonds shot up to 1,533%, however remaining below last week's level (1,614%) reached at the seven-year auction. This morning the wave rose up to 1,57%.
Technology stocks are under fire, starting with Apple and Pay Pal. Tesla lost 6%. In red, but more resistant, the other indices: Dow Jones -1,11%, S&P 500 -1,34%.
The strength of US real rates also involved the dollar, which rejected the euro below 1.20. Penalized the precious, and even Bitcoin. The US indices accumulated significant losses before stabilizing. The S&P fell 2,5% and the Nasdaq 100 edged down 3%. “Only real rates are rising – notes Giuseppe Sersale of Anthilia – while inflation expectations are at a standstill. This marks a tightening of the financial conditions of the market”.
But these reactions won't move the Fed, which is busy evaluating the effects of the maxi-plan of economic stimuli being examined by the Senate. In the US, the number of workers who have applied for subsidies has meanwhile risen to 745.
The second theme of the day concerns the plenary session of the Chinese National People's Assembly, in which Beijing will illustrate the five-year plan for the economy. After containing Covid, Prime Minister Li Kequiang has forecast a GDP growth of "over 2021%" for 6. In the government plans the creation of more than 11 million new jobs in urban areas, where unemployment is 5,5%. The military budget will increase by 6,8% in 2021, up from 6,6% last year. But it will be "healthy" growth, without excesses and with the moderation needed to avoid the formation of bubbles on the markets. In short, Beijing suggests that aid and monetary stimulus will be provided carefully.
Asian Stock Exchanges have slowed down and this morning the situation is improving. Tokyo's Nikkei -0,5%, Hong Kong's Hang Seng +0,1%. CSI 300 of the Shanghai and Shenzen price lists +0,3%, Kospi of Seoul -0,4%, BSE Sensex of Mumbai -0,2%.
The week is about to end with this balance: Nikkei -1%, Hang Seng +0,2%, CSI 300 -1,7%, Kospi -2,3%, Taiex of Taipei -3,7%, BSE of Mumbai + 2,8%.
The third theme price sensitive it concerns oil, supported by the "moderation" of Saudi Arabia, in search of friends to avoid isolation after the assassination of Adnan Khashoggi. North Sea Brent at 67,3 dollars a barrel: yesterday's +4,8% is all due to Russia's change of attitude, which has adapted to Riyadh's requests on production: the special self-limitation regime remains in force for another month.
EUROPEAN EXCHANGES HOLD ON. BUT TODAY COMES THE WAVE ON THE BONDS
Thanks to the oil rally, European stocks contained pressure on equity values, while bonds were "frozen" awaiting the intervention of Fed chairman Jerome Powell in the evening. Given the reaction of the markets, it is likely that fears related to inflation are destined to resurface in the morning. But it is very unlikely that, one week after the ECB directorship, the central bank will go beyond declarations of principle such as those of Pablo Hernandez de Cos, a member of the board who said that the central bank should explore the option of controlling the curve of yields, as Australia and Japan already do. But another central banker, the Portuguese Mario Centeno, warned that this strategy could prove difficult. “Adopting curve control – he said – implies announcing a target price for government bonds at different maturities. And that's not the easiest way forward."
MILAN +0,2%. DRAGONS STOP ASTRAZENECA
Piazza Affari closed up 0,2%, at 23.093 points, with sales of technology, fashion and banks offset by purchases of utilities and oil.
Italy is the first European country to refuse exports of the AstraZeneca vaccine. Rome has notified the EU Commission of the decision to block 250 thousand doses destined for Australia and Brussels has given the go-ahead.
PROSIEBEN TURNS OFF MEDIASET'S HOPE
In the rest of Europe, Frankfurt loses 0,18%; Amsterdam -0,86%; London -0,35%. Paris flat, Madrid progressing: +0,3%.
Worth noting is the collapse of Vivendi (-4,2%), which did not exclude an interest in the purchase of M6, the issuer controlled by Bertelsmann. Meanwhile, ProsiebenSat has denied talks for a potential merger with Mediaset, which controls 12,7% of the German group.
SPREAD TO 106. THE BTP VERDE PURCHASED BY 530 INSTITUTIONAL
The BTP ends the session with little movement, awaiting the intervention of Fed chairman Jerome Powell. In closing, the spread on the 10-year Bund is at 106 basis points, from 105 at the start and from 104 yesterday.
The 0,74-year rate stands at 0,75%, after closing at XNUMX% the previous session.
Foreign investors bought 73,7% of the first green BTP, with orders exceeding 80 billion euros. This is what the Treasury did know in a note which also states that a total of around 530 investors took part in the operation.
Among foreign investors, a significant share – about 22,1% – was subscribed in the United Kingdom. The remainder of the placement, over 40%, was largely allocated in continental Europe. US investors were awarded 1,9% of the issue, while around 0,5% went to Asian investors.
IACOVONI (DARLING): "GREEN BOND, SOON WE WILL GIVE AN ENOUGH"
Italy aims to have an important and long-term presence on the green government market and will certainly reopen the green BTP expiring in April 2045, which gathered demand for over 80 billion on Wednesday. This was stated by the debt manager Davide Iacovoni, underlining that a share of more than 53% was taken by the funds, "a sign that the stock has entered portfolios of management already specialized in sustainable investments", says the Treasury debt manager .
UNDER STM FIRE, TELECOM BOUNCES
The chip crisis is on the air in Piazza Affari, affected by the collapse in the supply of automotive products. It pays a hefty Stm price, down a generous 3,6%. Conversely, Telecom Italia rebounds (+2,3%). Kepler which improved the target price from 0,7 to 0,75 euro per share. Campari also stood out (+2,41%).
UTILITIES TO THE RESCUE, ENEL LOAN BOOM
Utilities also rebounded, already weighed down by the sharp rise in yields. Enel gains 2,85%, thus celebrating the issue on the European market of a non-convertible subordinated bond loan in euro, intended for institutional investors, for a total amount of 2,25 billion.
Italgas also rose (+1,8%). Equita Sim confirmed the hold recommendation and the target price at 6 euros. The company, analysts point out, "announced that it had obtained the assignment of the Turin1 tender" and that this "unlocks investments for 300 million, already included in the 2020-2026 business plan presented in October".
DEL VECCHIO: NO PLAN WITH CALTAGIRONE ON MEDIOBANCA
Also in Milan the oil markets are rebounding: Saipem +2% after some very heavy sessions. Better Eni (+2,25%) and Tenaris (+3,49%).
Banks tend to be negative: Unicredit (-1,49%) and Fineco (-0,93%) are among the worst: on 8 February 14.403 new customers opened a current account at the bank led by Alessandro Foti, which during the month raised 1,26 billion euros (+64% compared to 770,6 million a year ago).
Intesa Sanpaolo sells 1%, Banco Bpm -1,5%. Mediobanca (-0,11%) and Generali (-0,28%) also slow down after Francesco Gaetano Caltagirone's blitz on Piazzetta Cuccia. "I did not know that Caltagirone was buying Mediobanca shares. We have known and respected each other for a long time, but each goes his way completely independently ”. So Leonardo Del Vecchio is not overly surprised to see that the Roman entrepreneur, his partner in Generali, is convinced that even Mediobanca can be a good deal. But the clues, according to Equita, go in another direction. Caltagirone, recalls the broker, seems in fact to replicate the scheme followed by Del Vecchio, who entered the capital of Mediobanca a year and a half ago, becoming its first shareholder with 13,2% (he has the green light from the ECB to to 20%, and is also the third shareholder of Generali with 4,84%, just behind Caltagirone, which has 5,65%).
SOFT BRAKING FOR STELLANTIS. FERRARI NAILS (-2,08%)
Among industrialists, Stellantis slows down (-1,4%) following the publication of the 2020 results. Equita writes that, “while confirming our positive recommendation and the presence in the portfolio since it is one of the most interesting industrial stories at European level, we reduce the weight in the portfolio slightly due to some short-term uncertainty”. Ferrari loses out (-2,08%).
AMPLIFON, THE LANDSLIDE DOESN'T STOP
Sales of Amplifon continue (-2,5%) after the 2020 results disclosed yesterday which were not appreciated by the market. One analyst notes that he "did not like the lack of growth range in 2021 for a business that is not subject to the problems of the pandemic". The stock dropped 8,3% on Wednesday.
